Exhibit
10.01


 





 


1060
East. Arques Ave.


Sunnyvale
CA 94085


Ph:   (408) 616-4000


Fax:
(408) 830-9525


 


April 17, 2004


 


Robert Valiton


[address]


 


Dear Rob:


 


Silicon Image, Inc. (the
“Company”) is pleased to confirm our offer of continued employment to you. The
terms of our offer and the benefits provided by the Company are as follows:


 


1.                                       You will report to the Chief Executive
Officer in the position of Vice President, Worldwide Sales of the Company.  By your signature below, you hereby
concurrently resign from your other sales positions at the Company.


 


2.                                       Your annual base salary will be $240,000
per year, effective as of April 1, 2004. 
You will be eligible to receive a cash incentive bonus of $60,000 for
achievement of on-target IC product revenues for the 2004 fiscal year.  Any additional cash incentive bonus for
over-achievement beyond on-target IC product revenues for the 2004 fiscal year
will be memorialized in an addendum to this letter.  You will receive a one-time relocation incentive payment of $60,000
and reimbursement of your actual relocation costs, up to $40,000.  We will also recommend that the Compensation
Committee grant you a stock option for 300,000 shares with an exercise price
equal to the closing price of our stock on the date of grant which will vest
monthly over four years provided you continue to be employed by us.


 


3.                                       You will be eligible to participate in
the employee benefit plans and executive compensation programs maintained by
the Company applicable to other employees and key executives of the Company,
including, without limitation, retirement plans, savings or profit-sharing
plans, deferred compensation plans, supplemental retirement or excess-benefit
plans, stock option, stock purchase, incentive or other bonus plans, life, disability,
health, accident and other insurance programs, and similar plans or
programs.  You will be eligible for the
applicable number of days of paid PTO per year, per the PTO policy.


 


4.                                       Upon termination of your employment with
the Company for any reason, you will receive payment for all unpaid salary and
PTO accrued to the date of your termination of employment and your benefits
will be continued under the Company’s then


 


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existing benefit plans
and policies for so long as provided under the terms of such plans and policies
and as required by applicable law.  You
will not otherwise be entitled to any other compensation, award or damages with
respect to your employment or termination, except that in the event that your
employment is terminated by the Company without “Cause” (as defined following)
you will also be entitled to receive cash severance in an amount equal to six
months of your then-applicable annual base salary, net of applicable taxes
(which may be paid in the Company’s discretion in a lump sum or according to
its normal payroll cycle).


 


As used herein, “Cause”
means (i) any breach of this agreement, the employee inventions and
confidentiality agreement between you and the Company, or any other written
agreement between you and the Company, if such breach causes harm to the
Company; (ii) any negligence or willful misconduct by you in your performance
of duties to the Company that causes harm to the Company; (iii) your repeated
failure to diligently follow the lawful directions of the Board of Directors of
the Company or the person to whom you report or your repeated failure to
diligently perform your duties in a reasonable manner pursuant to this
agreement; (iv) commission of a felony under the laws of the United States or
any state thereof; (v) commission of any act of fraud, embezzlement or
dishonesty or breach of fiduciary duties; (vi) the abuse of alcohol or
controlled substances that has a detrimental effect upon your performance of
your duties under this agreement; or (vii) a good faith determination by the
Company’s Board of Directors or the person to whom you report that your
performance is unsatisfactory.


 


In consideration of and
as a condition to receiving the severance set forth in this Section 4,
concurrently with your termination of employment, you will execute an agreement
in form acceptable to the Company providing for a full unilateral release in
favor of the Company and its directors, officers and other related persons.  However, you will not be required to release
any right to indemnification that you may have under applicable law, the
Company’s bylaws or the Indemnity Agreement between you and the Company.


 


5.                                       During the term of your employment with
the Company and for one year thereafter, you will not, on behalf of yourself or
any third party, solicit or attempt to induce any employee of the Company to
terminate his or her employment with the Company.


 


6.                                       Should you decide to accept our offer,
you will remain an at-will employee of the Company, which means the employment
relationship can be terminated by either of us for any reason at any time.  Any statements or representations to the
contrary (and, indeed, any statements contradicting any provision in this
letter) should be regarded by you as ineffective.  Further, your participation in any stock option or benefit
program is not to be regarded as assuring you of continuing employment for any
particular period of time.


 


7.                                       This letter agreement constitutes the
entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or
oral, between the parties with respect to such subject matter, including
without limitation the letter agreement between you and the Company dated
July 16, 1999.  This agreement will
be governed by the laws of the State of California


 


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without reference to
conflict of laws provisions.  The
parties agree that any dispute regarding the interpretation or enforcement of
this agreement shall be decided by confidential, final and binding arbitration
conducted by Judicial Arbitration and Mediation Services (“JAMS”) under the
then existing JAMS rules rather than by litigation in court, trial by jury,
administrative proceeding or in any other forum.


 


8.                                       If you decide to accept our offer, and I
hope you will, please sign the enclosed copy of this letter agreement in the
space indicated below and return it to me. 
Your signature will acknowledge that you have read and understood and
agreed to the terms and conditions of this offer.  Should you have anything else that you wish to discuss, please do
not hesitate to call me.


 


We look forward to the
opportunity to continue working together.


 


[Remainder of Page
Intentionally Left Blank]


 


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Very truly yours,


 


Silicon Image, Inc.


 


 


	
  By:

  	
  /s/
  David D. Lee

  	
   

  
	
   

  	
  David
  D. Lee, CEO

  



 


 


	
  Acknowledged, Accepted
  and Agreed

  
	
   

  
	
   

  
	
  /s/ Robert Valiton

  	
   

  
	
  Robert Valiton

  



 


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ADDENDUM


 


2004 VP Worldwide Sales Bonus Plan


 


	
  Performance

  to Plan (PTP)

  	
   

  	
  Base

  	
   

  	
  Revenue-based

  Incentive

  	
   

  	
  Percent of

  PTP@100%

  	
   

  	
  Total Cash

  Compensation

  	
   

  
	
  70

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  21,000

  	
   

  	
  35.0

  	
  %

  	
  $

  	
  261,000

  	
   

  
	
  75

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  22,500

  	
   

  	
  37.5

  	
  %

  	
  $

  	
  262,500

  	
   

  
	
  80

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  30,000

  	
   

  	
  50.0

  	
  %

  	
  $

  	
  270,000

  	
   

  
	
  85

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  37,500

  	
   

  	
  62.5

  	
  %

  	
  $

  	
  277,500

  	
   

  
	
  90

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  45,000

  	
   

  	
  75.0

  	
  %

  	
  $

  	
  285,000

  	
   

  
	
  95

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  52,500

  	
   

  	
  87.5

  	
  %

  	
  $

  	
  292,500

  	
   

  
	
  100

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  60,000

  	
   

  	
  100.0

  	
  %

  	
  $

  	
  300,000

  	
   

  
	
  105

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  86,400

  	
   

  	
  144.0

  	
  %

  	
  $

  	
  326,400

  	
   

  
	
  110

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  112,800

  	
   

  	
  188.0

  	
  %

  	
  $

  	
  352,800

  	
   

  
	
  115

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  139,200

  	
   

  	
  232.0

  	
  %

  	
  $

  	
  379,200

  	
   

  
	
  120

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  165,600

  	
   

  	
  276.0

  	
  %

  	
  $

  	
  405,600

  	
   

  
	
  125

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  192,000

  	
   

  	
  320.0

  	
  %

  	
  $

  	
  432,000

  	
   

  
	
  130

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  224,400

  	
   

  	
  374.0

  	
  %

  	
  $

  	
  464,400

  	
   

  
	
  135

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  256,800

  	
   

  	
  428.0

  	
  %

  	
  $

  	
  496,800

  	
   

  
	
  140

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  289,200

  	
   

  	
  482.0

  	
  %

  	
  $

  	
  529,200

  	
   

  
	
  145

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  321,600

  	
   

  	
  536.0

  	
  %

  	
  $

  	
  561,600

  	
   

  
	
  150

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  354,000

  	
   

  	
  590.0

  	
  %

  	
  $

  	
  594,000

  	
   

  



 


	
  Accelerator
  Ramp

  	
   

  
	
  Percent of
  Quota Achieved

  	
   

  	
  Accelerator

  	
   

  	
  Annual
  Payout

  per%

  	
   

  
	
  0%

  	
   

  	
  75

  	
  %

  	
  50

  	
  %

  	
  $

  	
  300

  	
   

  
	
  76%

  	
   

  	
  100

  	
  %

  	
  163

  	
  %

  	
  $

  	
  1,500

  	
   

  
	
  101%

  	
   

  	
  125

  	
  %

  	
  320

  	
  %

  	
  $

  	
  5,280

  	
   

  
	
  126%

  	
   

  	
  150

  	
  %

  	
  370

  	
  %

  	
  $

  	
  6,480

  	
   

  
										



 


5